An account receivable account adds to the account list when you create a company file in MoneyWorks. The amount owed by the customer, for goods and services sold on credit, get updated in accounts receivable account. Renamed the accounts receivable to trade debtors (or trade receivable) if you prefer to separate trade from non-trade. Then, add other debtors or inter-company receivable to the list for tracking non-trade debtors or subsidiaries.
Each debtor (the name) links to a receivable account. Whether it is a trade, non-trade, or subsidiary, the receivable account field of the name has to tag to an account receivable account to use it in invoices. The ageing process kicks in when an invoice posted.
Since a name has to tag to a receivable account, invoices to the subsidiary may have to do it outside the system if the inter-company receivable is a current asset type instead of an account receivable. The function is different, although accounts receivable is part of the current assets category. It is workable, but maintain the outstanding in foreign currency may be time-consuming.
You can set the bank, accounts receivable, and accounts payable with a foreign currency. These accounts get revaluated once new exchange rate entered. If inter-company receivable has set up as a current asset type; then, the exchange gains or losses have to record via a general journal if the outstanding is in foreign currency. It could be tedious when there are lots of entries.
Invoice subsidiary for expenses paid on behalf
Assume you have paid $10,000 to XYZ supplier, which inclusive of $2,000 worth of services on behalf of your subsidiary ABC.
As mentioned earlier, you can invoice the subsidiary when the name has tagged to a receivable account. Create an invoice to the ABC subsidiary from MoneyWorks for $2,000 and add the expense which you use for paying XYZ supplier at the detail line of the invoice. The invoice posted debit the inter-company receivable and credit expense account, which will then reduce the expense from the original $10,000 to $8,000.
The above example is for illustration, the account used may vary.
Both methods have advantages and shortfall. Consult your accountant and try out on a sample file with your existing data and compare the result before adopting either.
Note: Some accountant may name it as Intercompany or Interco instead of Inter-company.